3 Lessons for Foreclosing Lenders

In this article we will look at three lessons that can be learned from the existing case law in New York to prepare lenders for some of the defenses that borrowers may raise in foreclosure proceedings. 1. Wait for a payment default Whenever possible, lenders should wait to commence foreclosure proceedings until the borrower has […]

Considerations for Foreclosing Mezzanine Lenders – Part 2

Here, we continue our discussion of considerations for foreclosing mezzanine lenders. Type of Foreclosure In preparing to exercise remedies under the mezzanine loan documents, a lender first must determine which type of enforcement action best suits the circumstances. Mortgage vs. mezzanine foreclosure Lenders holding both mortgage and mezzanine loans on the same property will need […]

Considerations for Foreclosing Mezzanine Lenders – Part 1

During the real estate boom of the 90s and early 2000s mezzanine lending became a commonplace source of capital for developers and other sponsors. Now, as the economic downturn continues and real estate values continue to fall, more and more mezzanine lenders are finding themselves with defaulted loans. In this series, we will examine five […]

Non-Recourse Carveout Guaranties Upheld in New York

In a pair of decisions this year, the New York Supreme Court enforced the full recourse provisions of a non-recourse carve-out guaranty where the borrower filed a voluntary bankruptcy petition. While this is good news for lenders holding these so-called bad-boy guaranties -- and one less arrow in the quivers of distressed borrowers -- there […]